Australian electricity and gas markets - August 2021 update

What you need to do

Stakeholders should note the new rules and reports published below, and note the deadlines for making submissions.

There have been a number of very significant developments and we have published detailed articles on them – the links to our articles are included in the information below.

National Electricity Rules

• On 3 August 2021, the AEMC received a rule change request from AEMO to amend the National Electricity Rules in respect of the removal of UFE from liable load under the RRO. The AEMC has not yet initiated this rule change request.
• On 5 August 2021, the AEMC initiated the Five-minute settlement contingency plan rule change process. Further information on this newly initiated rule change process can be found here.
• On 12 August 2021, the AEMC published its final rule and determination in its Access, pricing and incentive arrangements for distributed energy resources rule change. This final rule implements significant reforms, including recognising export services as a distribution service and enabling Distribution Network Service Providers to charge for export service. We published an article on this rule change which can be found here. 
• On 19 August 2021, the AEMC commenced its Transmission Planning and Investment Review to identify issues within the existing regulatory frameworks in relation to the timely and efficient delivery of major transmission projects and to explore and recommend possible regulatory changes. Those interested can view our update on the launch of this review here. 
• On 26 August 2021, the AEMC initiated the Updating Short Term PASA rule change process which was requested by AEMO on 28 June 2021. Further information on this rule change can be found here. 
• The AEMC also delayed publication of the final rule change in relation to Settlement under low operational demand. The final rule is now due to be published by 7 October 2021.

National Energy Retail Rules

• No retail rule change requests were received in August. Other than the DER rule change detailed above which impacts both the NER and the NERR, no AEMC determinations relevant to the NERR were published.

National Gas Rules

• No gas rule change requests were received in August. No AEMC determinations were published. 

Energy Security Board - Post-2025 Market Design

• On 26 August 2021, the Energy Security Board (ESB) published its long awaited final advice to Energy Ministers on post-2025 Market Design.  The ESB's final recommendations are comprised of numerous, substantial reforms, including recommendations to introduce a capacity mechanism and to progress a congestion management model. Interested parties can read our summary of the recommendations here.

NSW Electricity Infrastructure Road Map - LTESA

• On 9 August 2021, the NSW Government released a consultation paper outlining proposed design concepts and structural elements of Long Term Energy Service Agreements (LTESA) for eligible generation, long duration storage and firming projects. Submissions are due by 10 September 2021. Those interested can read our article on the consultation paper here. 

VRET 2

• On 31 August 2021, the Victorian Government launched its second Victorian Renewable Energy Target Auction (VRET2) to drive new investment in pursuit of meeting its commitment of sourcing 100% of renewable electricity for all Victorian Government operations by 2025. Tenders for VRET2 will close on 9 November 2021. Further information on VRET2 can be found here. 

Other Updates

• On 10 August 2021, the Victorian Government passed the Energy Legislation Amendment (Energy Fairness) Act 2021 (Vic) which includes provisions banning unsolicited sales and win back offers and criminal penalties for wrongful disconnections and life support breaches. The Act will come into effect on proclamation or otherwise on 1 May 2022. Ashurst has published an article on the reforms, which can be viewed here. 
• On 10 August 2021, the Queensland Minister for Energy, Renewables and Hydrogen Mick de Brenni launched public consultation to collect community feedback on Queensland's renewable energy zones (QREZ). The consultation paper outlines principles for engagement, local procurement and employment in relation to QREZ and can be viewed and responded to here.
• On 31 August 2021, AEMO released its 2021 Electricity Statement of Opportunities (ESOO) which provides technical and market data for the NEM over a 10-year period to inform planning and decision making. The ESOO can be found here. 

Click here to see our latest Energy Alerts, as part of our Energy Alert Series. 

Authors: Paul Newman, Partner; Andre Dauwalder, Senior Associate; Jacklin Molla, Lawyer.